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Are You Making The Right Decision In Filing For Bankruptcy?

Are You Making The Right Decision In Filing For Bankruptcy?
"Filing for bankruptcy is a financial decision that allows you to discharge the majority of debts you cannot repay now or in the near future. A personal bankruptcy under Chapter 7 discharges only your personal liability for debts such as:

1) Credit card statements.

2) Lawsuit judgments.

3) Medical expenses.

4) Unsecured debts owed by a sole proprietor to suppliers, consultants, accountants, or architects.

5) Obligations under a sole proprietor's leases and contracts (including commercial and residential property leases and equipment rental leases).

Personal loans and promissory notes, number six.

However, certain categories of debt will survive a Chapter 7 personal bankruptcy, meaning you will continue to owe them even after your case has concluded, just as if you hadn't filed for bankruptcy. The following are prevalent types of debt that are not discharged:

1) Pay arrearages on child support, alimony, and other domestic support obligations.

2) Fines, penalties, and restitution imposed by the court.

3) Certain tax debts, such as recent back taxes, any back taxes for which you failed to file a tax return, trust fund taxes (the employee's portion of Social Security and Medicare taxes), and debts you incurred to pay nondischargeable taxes (such as a cash advance on your credit card to pay your most recent tax bill).

4) Debts for indulgences exceeding $650 to a single creditor in the 90 days prior to filing.

5) Cash advances in excess of $925 received within 70 days prior to filing.

6) Loans owed to your pension plan, such as 401(k) withdrawals.

7) Student loans, unless their repayment presents an extreme hardship.

8) Debts incurred as a result of your own fraudulent activity (such as lying on a loan application), provided the creditor can establish the fraud to the bankruptcy court.

9) Debts incurred as a consequence of an incident in which you killed or injured another person while driving under the influence (DUI).

If you choose not to file for bankruptcy, you may wish to consolidate your debt or negotiate with your creditors. Nonetheless, if, after a thorough analysis of your entire financial situation, you conclude that bankruptcy is your best option, you must take the necessary measures to make this financial process work in your favor as much as possible. Consult with a financial expert for assistance in achieving this objective.

It is essential to learn as much as possible about bankruptcy. There are numerous online (including forums, websites, and blogs) and offline (including your local library) resources available to you to learn everything you need to know about the entire process.

For instance, if you are filing as an individual, you must file Chapter 7 or Chapter 13 bankruptcy. However, you will need to determine which one is most appropriate for your particular circumstance. Chapter 11 bankruptcy applies primarily to businesses and corporations, in which a reorganization plan is developed while the company's daily operations continue. Clearly, this does not apply to your circumstance.

Learn the differences between Chapter 7 and Chapter 13 bankruptcies so that you are familiar with how each option operates. The specifics of each are beyond the scope of this article; therefore, be sure to conduct adequate research on this topic, which will have a lasting impact on your financial life.

After learning everything there is to know about bankruptcy, it wouldn't harm to consider other options. As an alternative to declaring bankruptcy, you may decide to consolidate your obligations into one large monthly payment. If you are contemplating bankruptcy because you consistently fail to pay your monthly expenses on time or because you feel overwhelmed by credit card debt, it may be your best option at this time.

You can also attempt to live within your means for the next few years, which works well if you do not have a family or anyone for whom you are responsible. Alternatively, you could endeavor to negotiate with your creditors. There are numerous alternatives to bankruptcy for regaining financial stability, so be sure to explore as many avenues as possible in your efforts to get out of debt permanently.

If you are still contemplating bankruptcy, you should investigate the eligibility requirements. If you are insolvent, meaning you lack sufficient income to pay your debts, you will likely not be eligible for Chapter 13 bankruptcy. Conversely, if your circumstances are exactly the opposite, you will likely not qualify for Chapter 7 bankruptcy. Rarely, you may not qualify for either option, indicating that you have not thoroughly considered your other options.

If you qualify, consider all of your assets and liabilities. What will happen to your residence, automobile, retirement plan, etc.? Each state has distinct requirements in this regard, so be sure you understand how your property will be affected (or not affected). It is essential to compile an inventory of your assets and/or liabilities. As stated previously, bankruptcy does not discharge all debts, including child support payments.

Once you have gathered all of the required information, you must promptly begin the declaration process and allow nothing to stand in your way. It is best to work with an attorney or a financial expert to complete this task, and remember to always be entirely truthful. Some individuals, depending on their circumstances, may benefit from filing for bankruptcy.

" - https://www.affordablecebu.com/
 

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"Are You Making The Right Decision In Filing For Bankruptcy?" was written by Mary under the Finance / Wealth category. It has been read 212 times and generated 1 comments. The article was created on and updated on 31 May 2023.
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